Verbal offers to selling agents?
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Pauline CharltonPro Member
Real Estate Broker · Nashville, TN · Member since 2016 · 49 posts · 12 votesYou should annoy your agent if she is your agent. She can do the negotiating and making of offers to earn her commission. You will have representation and your offer will be specific with no room for assumptions, etc. Offers for real estate should be in writing. The listing agent has no obligation to present oral offers and if she does there are many elements that would not be addressed thus creating confusion and misunderstanding. Most listing agents know this and will say you should make a written offer or sho could offer to write it for you. You do not want a listing agent writing an offer for you especially if you have your own agent. The listing agent represents the seller and will write the offer to the benefit of the seller whom she represents. Your buyers agent will write the offer with your interests in mind.
27 Replies
- 10yPauline CharltonPro MemberReal Estate Broker · Nashville, TN · Member since 2016 · 49 posts · 12 votes
You should annoy your agent if she is your agent. She can do the negotiating and making of offers to earn her commission. You will have representation and your offer will be specific with no room for assumptions, etc. Offers for real estate should be in writing. The listing agent has no obligation to present oral offers and if she does there are many elements that would not be addressed thus creating confusion and misunderstanding. Most listing agents know this and will say you should make a written offer or sho could offer to write it for you. You do not want a listing agent writing an offer for you especially if you have your own agent. The listing agent represents the seller and will write the offer to the benefit of the seller whom she represents. Your buyers agent will write the offer with your interests in mind.
- 10yTom V.IA · Member since 2015 · 304 posts · 152 votesOP
Originally posted by @Pauline Charlton:
You should annoy your agent if she is your agent. She can do the negotiating and making of offers to earn her commission. You will have representation and your offer will be specific with no room for assumptions, etc. Offers for real estate should be in writing. The listing agent has no obligation to present oral offers and if she does there are many elements that would not be addressed thus creating confusion and misunderstanding. Most listing agents know this and will say you should make a written offer or sho could offer to write it for you. You do not want a listing agent writing an offer for you especially if you have your own agent. The listing agent represents the seller and will write the offer to the benefit of the seller whom she represents. Your buyers agent will write the offer with your interests in mind.
@Pauline Charlton thanks for the input. Of course a formal offer would be in writing and would be done by my agent. What I'm talking about is basically asking the selling agent, "So, do you think this seller would be receptive to an offer of $90K?". If they say no, then I say thanks for your time and I move on. If they say yes or maybe, then I call my agent and we go take a look. I'm just trying to get a ballpark idea of how firm the seller is with their asking price.
- 10yPauline CharltonPro MemberReal Estate Broker · Nashville, TN · Member since 2016 · 49 posts · 12 votesGet your agent to ask
- 10yTom V.IA · Member since 2015 · 304 posts · 152 votesOP
Originally posted by @Pauline Charlton:
Get your agent to ask
I don't understand how it is different whether I name a price or my agent does. Please explain.
- 10yPauline CharltonPro MemberReal Estate Broker · Nashville, TN · Member since 2016 · 49 posts · 12 votes
Your agent will have the comps and she might know more about the property than you may know because she has access to the applicable information or she knows where to get it. If , for example, you offer 90k without talking to your agent and after the fact your agent finds that an offer of $80 appropriate, you already planted the seed of 90k in the seller's agent's mind... She will be trying to counter to reach that figure. It makes her job more difficult and you could lose a few thousand because of that.
In addition, there are terms that must be considered. Do you want the seller to pay closing costs? title costs? Do you want an inspection? Who is responsible for repairs? is the seller paying any costs that would reduce the 90k that you want to offer?
These are the things for which you hired your agent; let her do her job.
- 10yTom V.IA · Member since 2015 · 304 posts · 152 votesOP
Originally posted by @Pauline Charlton:
Your agent will have the comps and she might know more about the property than you may know because she has access to the applicable information or she knows where to get it. If , for example, you offer 90k without talking to your agent and after the fact your agent finds that an offer of $80 appropriate, you already planted the seed of 90k in the seller's agent's mind... She will be trying to counter to reach that figure. It makes her job more difficult and you could lose a few thousand because of that.
In addition, there are terms that must be considered. Do you want the seller to pay closing costs? title costs? Do you want an inspection? Who is responsible for repairs? is the seller paying any costs that would reduce the 90k that you want to offer?
These are the things for which you hired your agent; let her do her job.
Thanks for the information Pauline.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes10y
If my offer is going to be significantly below list price I always make the offer verbally first so as to not waste my own time writing the offer and the listing agents time going through the offer. I usually say something to the effect of I (or my client) wants to offer $X, is it even worth the time of writing up the offer? Most of the time they tell me not to bother writing it up, but sometimes they say go ahead and write it up.
District Invest Group546 Reviews - 10yTom V.IA · Member since 2015 · 304 posts · 152 votesOP
@Russell Brazil Thanks. That is exactly what I'm wanting to do.
- Investor · Moorpark, CA · Member since 2016 · 248 posts · 191 votes10y
In my opinion, it never hurts to take 5-10 minutes to e-sign and send an offer. What is it really costing you aside from that time? The upside is that the seller gets a real written offer, and sometimes sellers can make surprising decisions based on real offers in their hands. Similar to writing goals down to bring them into reality, writing an offer down and getting it in front of a seller is vastly more effective then an imaginary, non-existent offer you're asking them to consider. Furthermore, you can't get a counter offer to an imaginary offer, and sometimes the counter offer can be surprisingly workable. Just my experience as both a buyer and seller's agent in my area - it could depend on the mentality/culture of the area you're in.
- 10yHeather SkowronskyPro MemberReal Estate Agent · Manassas, VA · Member since 2013 · 118 posts · 63 votes
The only issue I can see by initially circumventing your agent could potentially be "cut out" of the deal and/or their commission when you do end up writing an offer because the listing agent could argue that your agent was not "procuring cause" for your interest in the property since you contacted the listing agent directly and began negotiations. I would suggest letting the listing agent know up front that you are working with an agent. Even better, email the listing agent with your offer (beneficial to you because in real estate it needs to be in writing) and copy your agent on the email. Most agents in my area won't present an offer unless they have it in writing. Sending the email is probably even faster than the phone call.
- 10yTom V.IA · Member since 2015 · 304 posts · 152 votesOP
Originally posted by @Nick G.:
In my opinion, it never hurts to take 5-10 minutes to e-sign and send an offer. What is it really costing you aside from that time? The upside is that the seller gets a real written offer, and sometimes sellers can make surprising decisions based on real offers in their hands. Similar to writing goals down to bring them into reality, writing an offer down and getting it in front of a seller is vastly more effective then an imaginary, non-existent offer you're asking them to consider. Furthermore, you can't get a counter offer to an imaginary offer, and sometimes the counter offer can be surprisingly workable. Just my experience as both a buyer and seller's agent in my area - it could depend on the mentality/culture of the area you're in.
Thanks Nick, that makes sense. The thing is, at this point in analyzing a property I'm not really wanting to make an official offer yet. I just want to find out if the seller would even CONSIDER my price before I even waste mine and my agent's time going to look at the property or writing an offer.
- 10yTom V.IA · Member since 2015 · 304 posts · 152 votesOP
Originally posted by @Heather Skowronsky:
The only issue I can see by initially circumventing your agent could potentially be "cut out" of the deal and/or their commission when you do end up writing an offer because the listing agent could argue that your agent was not "procuring cause" for your interest in the property since you contacted the listing agent directly and began negotiations. I would suggest letting the listing agent know up front that you are working with an agent. Even better, email the listing agent with your offer (beneficial to you because in real estate it needs to be in writing) and copy your agent on the email. Most agents in my area won't present an offer unless they have it in writing. Sending the email is probably even faster than the phone call.
Thanks, Heather. I would never try to circumvent my agent, I'm actually trying to help her by not wasting her time. I agree that email is better and faster. I actually did this yesterday for a couple of listings and got email responses back from the selling agents within an hour. In my email I do tell them that I'm already working with an agent, but don't want to waste time touring the property or writing an offer if the buyer is firm on their asking price.
My main reason for asking this question in the forum was to make sure I'm not violating some unspoken taboo thing in the real estate agent world by contacting the selling agents directly to ask a question.
- 10yMindy JensenPro MemberBiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
If your agent is getting annoyed with making offers, you need a new agent. That said, if you are offering 20% of asking price, I can see why they would be annoyed. But if you are making reasonable offers, your agent should be protecting your interests by being the go-between. I see no benefit for you to contact the listing agent directly.
- 10yJeff CopelandBusiness MemberReal Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
I'm both an investor and an agent, and I can tell you that, as a buyer's agent, I'd be more annoyed that my buyer skipped over me and contacted a seller or listing agent directly than I would be by being asked to prepare an offer. Your agent represents you and needs to know what's going on, and they can usually glean some extra details from the MLS and/or a phone call to a listing agent prior to making said offer, and advise you accordingly.
Furthermore, no listing agent worth their salt is going to tell you, "sure...my buyer will accept an offer of X amount". An offer is more than just a price - the seller needs to see your written offer, along with all the terms and conditions of the offer (escrow amount, financing terms, contingencies, dates, etc) in order to make an informed decision.
As a listing agent, my first question would be, "Are you already working with another realtor?" This is ingrained in us because the NAR Code of Ethics prohibits us from soliciting business from another realtor's clients, but there's also a certain protocol and level of professional courtesy involved, and listing agents expect to hear from the buyer's agent if the buyer is represented.
I've also had instances where a seller inadvertently sent documents directly to the other agent before I reviewed them, and it ended up costing them time and money. Same principal applies - your agent can't do their job if you cut them out of the loop.
Copeland Morgan LLC4.770 Reviews - 10yJeff CopelandBusiness MemberReal Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
@Tom V. - One other clarification - I acknowledge this can be confusing, but in a typical transaction where there is one agent/brokerage is representing the seller and a different agent/brokerage representing the buyer:
- The terms selling agent and buyers agent are interchangeable;
- Thus, the selling agent is not the listing agent (quite the opposite)
Copeland Morgan LLC4.770 Reviews - 10yTom V.IA · Member since 2015 · 304 posts · 152 votesOP
Originally posted by @Mindy Jensen:
If your agent is getting annoyed with making offers, you need a new agent. That said, if you are offering 20% of asking price, I can see why they would be annoyed. But if you are making reasonable offers, your agent should be protecting your interests by being the go-between. I see no benefit for you to contact the listing agent directly.
Thanks, Mindy. My agent is not annoyed, I'm just trying to prevent that. I'm not wanting to make 20% offers, more like 70%. The more I think about it, and see comments here, I should probably just straight up tell her that I want to make some 70% offers and if she thinks it to be a waste of time she should just tell me. Transparency is probably best. Thanks.
- 10yTom V.IA · Member since 2015 · 304 posts · 152 votesOP
Originally posted by @Jeff Copeland:
@Tom V. - One other clarification - I acknowledge this can be confusing, but in a typical transaction where there is one agent/brokerage is representing the seller and a different agent/brokerage representing the buyer:
- The terms selling agent and buyers agent are interchangeable;
- Thus, the selling agent is not the listing agent (quite the opposite)
Thanks, Jeff. I appreciate the clarification.
- Manassas, VA · Member since 2013 · 60 posts · 24 votes10y
I think a good rule of thumb is to always use your agent as they have your best interests and represent you. If you have a good agent and a good relationship with them, don't risk creating a misunderstanding by leaving them out of a step. As has been previously mentioned, there are a set of rules and ethics for agents and brokers that should always be maintained if you want to be respected by your team, and as a professional in the investing world.
I would have this discussion with your agent. Let your agent express their feelings and concerns. If you think your offer might be a lowball, and you don't trust your agent's advice on whether it's worth the try, then evaluate your objectiveness or get a new agent.
There are so many potential problems that can arise if you talk to listing agent or sellers agent prior to speaking to your agent. Your offer will look more legitimate and be more seriously considered if you have a buyers representative interacting for you anyway.
With our agent we trust and respect her input on appropriate offer ranges. She has helped us many times with factors we may have not been aware of or have forgotten. She has additional info from the MLS like agent notes, and In regard to price, location, jurisdictional issues, market conditions etc.... The only time we consider making a direct offer is with a home seller who responded directly to our marketing and doesn't have a listing agent. All the best.
- 10yTom V.IA · Member since 2015 · 304 posts · 152 votesOP
@Sonia Spangenberg Thanks for the advice, Sonia. You speak from experience, and I appreciate it. Thanks!
- Manassas, VA · Member since 2013 · 60 posts · 24 votes10y
One other tidbit...You should always ask your agent for their rationale when they are advising you on offer prices. It is an opportunity to be educated further and/or to evaluate their intelligence, objectivity, skills, patience and willingness to serve.
- 10yTom V.IA · Member since 2015 · 304 posts · 152 votesOP
Originally posted by @Sonia Spangenberg:
One other tidbit...You should always ask your agent for their rationale when they are advising you on offer prices. It is an opportunity to be educated further and/or to evaluate their intelligence, objectivity, skills, patience and willingness to serve.
Good point, thanks for the tip. I'm never one to take the advice of someone blindly, I always want to know the why.
- 10yMary K.Pro MemberInvestor · Ocala, FL · Member since 2015 · 157 posts · 88 votes
@Tom V. Here is my newbie experience. I was working with an agent last year and making offers that were 100 percent of similar comps (not even as low as 70 to 90 percent). So they were good offers, though my strategy was not.
They kept getting rejected b/c sellers were hearing every night on the news about the blistering hot real estate market that had turned around and they suddenly wanted top dollar for their property, above what comps would justify, even above asking price.
So this agent, after having 3-4 offers rejected, told me she didn't want to keep presenting offers unless I was going to start making "good offers." This is an example of having the wrong agent. '
My new agent is young, super savvy about investing (has rentals himself), grew up in a family of RE investors, and told me that I should be sending out 10 lowball offers to see what bites. See what a difference in RE agents can make? So don't worry about wasting anybody's time. Just find the right RE agent who is a clone of you. And you will be on the right track.
- 10yTom V.IA · Member since 2015 · 304 posts · 152 votesOP
@Mary K. Thanks, Mary. I appreciate the advice. Sounds like your previous agent was primarily interested in just closing deals, rather than actually helping their clients. Since I started this thread, I've explained my investing strategy to my agent and she's fully on board, and has been very helpful.
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